president bush. mr. secretary, thanks very much for joining us. i don't know if you prefer mr. secretary or governor. you have two good titles there. but take us into her seat right now. she is under enormous pressure. how do you think she got into this mess? >> wolf, i have to say that the seeds of this problem were sown a year ago as the administration made decisions not to issue regulations that were required for those developing the system to actually do it properly. and meps whhence when the site go live, it had been inadequately tested. they were issuing regulations in september for an october 1 implementation. i'm sure that will come up in the hearing today. but i think in terms of looking at causes, i think that's a big one. >> so who is to blame for that? >> well, let's just say i don't think that secretary sebelius made all those decisions to

defer them. i think that was in large measure a decision made i suspect by the white house as they were navigating through an election at that point in time. and that was a political call they made and they're now making -- now having to deal with the consequence of that. >> that's a pretty serious blunder. if it's done for political reasons when this is the signature achievement of president obama, health care for everyone in the united states, something that then girls in washington have been working on for decades, they finally get it passed and you're saying for political reasons because of an election they were delaying certain critically important elements leading up to the release of this plan, is that what you're saying? >> wolf, they will have to answer as to why those regulations weren't issued. but i think it's clear they had three years to do it. there was a period of time when nothing happened, at least nothing publicly happened. and those regulations -- decisions were made not to issue

them and i think at the very root of this problem is the fact that they were very late in issuing the regulations that the contractors needed and those who had to respond to they will needed in order to set the system up to work properly. >> there you see she's now seated, kathleen sebelius. fred upton is about to hit the gavel and make sure that this hearing starts. he'll open up with a statement as i said, henry waxman who used to be the chairman of the committee always outspoken himself, he will have an opening statement. as we a wait, let's bring brianna keilar. the president is getting toward deliver a major speech on this subject later today? >> that's right. president obama will be heading to boston and i think what's really interesting about his trip there is he'll be delivering rouremarks where mit

romney signed his health care reform or massachusetts health care reform program into law with senator kennedy standing by watching him. so it's a little bit of a statement as president obama responds to some of the republican criticism that he's also getting.nding for headline. >> here is fred upton, chairman of the committee. >> good morning. energy and commerce committee welcomes the president's point person on health care, secretary sebelius, as part of our continuing oversight of the health care law. and we look forward to a thoughtful conversation on a number of issues including transparency and fairness. over months leading up to october 1 launch, the secretary and her colleagues at hhs repeatedly looked us in the eye and testified that everything was on track. despite the numerous red flags

an lack oall systems were a go. but something happened along the way. either those officials did not know how bad the situation was or they did not disclose it. ed a sli, here we are now five weeks into enrollment and the news seems to get worse by the day. healthcare.gov was down last night at 5:00 p.m.. it alsos of down on monday and it crashed last weekend. and even this morning when we attempted to view the site before the hearing, we were hit with an error message. but this is more than just a website problem. that was supposed to be the easy part, remember? americans were assured that their experience would be similar to other onlean transactions like purchasing a flight or ordering a pizza and that their sensitive personal information would always be secure. but after more than three years to prepare, malfunctions have become the norm and the administration has pivoted from saying they're on track to setting a new target date of

november 30th. and for those few americans who have successfully applied, the website glitches become provider glitches come january 1st? americans are scared and frustrated. and this situation should rise above politics. many folks at home have spent hours or even days trying to sign up. they continue to take time away from work or loved ones, but have made little progress. soon they may worry about being on the wrong side of their government facing potential penalties. i recently spoke to a woman from michigan who was excited to sign up but has become very it is illusioned after spending hours on the phone and website with little success. there are also millions of americans coast to coast who no doubt believe that the president repeated promises that if they like their plan, that they would be able to keep it. no matter what. they're now receiving termination notices and for those who lose their coverage they like, they may be losing their faith in their government.

today's hearing is about fairness for the american people who are losing their coverage or seeing their premiums sky rocket as high as 400%. it hearing is also about transparency. while the administration continues to boast the number of americans that have applied, they intentionally withhold precise enrollment numbers. why. these numbers are critical to fully understand the status engaging the progress of implementation. lead contractor cgi testified only last week that they had the data but needed the administration's permission to release it. we asked the secretary on october 8 for those figures but we still have not received a response. we hope to get one today. american people deserve answers as well as the peace of mind that promises will be kept. the secretary has an opportunity today to embrace transparency an start restoring the public's faith in the administration and the xwoemgovernment. i yield to mr. waxman.faith in the government.

i yield to mr. waxman. >> thank you. i'm pleased secretary sebelius is here today. she's here to discuss the affordable care act just like with medicare part d, the launch of the new website has not gone well. but just like medicare part d, the early glitches in this rollout will soon be forgotten. a lot of the discussion today will focus on that website. this is an important issue and i want to learn what the secretary can tell us about the problems being experienced and how they will be fixed. but we should keep this issue in perspective. the affordable care act is working. it has been improving the health security of millions of americans for the past three years. because of the affordable care act, more than 7 million people on medicare have saved more than $8 billion on their prescription

drugs. more than 100 million americans have access to free preventive coverage. and no longer face life time limits on their coverage. over 10 million americans have received rebates from insurance companies. and finally, this january, the worst abuses of the insurance industry will be halted. never again will a family be denied coverage because their child has a chronic health condition. never again will individuals see their premiums shoot up because they got sick or face an unexpected medical sgeexpense. never again will a woman have to pay twice as much as a man for the same insurance. that's why you allowing insurers to continue to offer deefficient plans next year is such a bad

policy. the law says all plans except those that were grandfathered in in 2010 must meet the new consumer protection standards. insurance companies can continue offering flimsy coverage if we do not enforce that. it is understandable that there will be a focus today on what isn't working. but we must also remember what is working. the health insurance plans that are being offered in the exchanges are between plans, their premiums are much lower than expected. 60% of the uninsured individuals shopping in the new marketplaces will be able to get coverage for less than $100 per month, half of young adults will be able to get coverage for less than $50 per month. and since congress adopted the affordable care act, health care

costs across the whole economy have grown at their lowest level in decades. the success of the afford able care act is due to the efforts of many people, but one individual more than any other is responsible all the good that has been accomplished and that is our witness today, secretary sebelius. so i would urge my colleagues to stop hyperventilating. the problems with healthcare.gov are unfortunate and we should investigate them, but they will be fixed and then every american will finally have access to affordable health insurance. thank you, mr. chairman. >> i want to clarify energy and commerce committee practice for the swearing in of witnesses. the committee typically has two types of hearings. oversight hearing and hearings that focus on legislation and policy. secretary sebelius has testified

previously before our committee to discuss issues related to the hhs budget or other policy matters. as is the case with all policy witnesses, secretary sebelius was not required to take apoath prior to testifying. today's hearing is different. it is an oversight hearing. it is a long standing committee practice to swear in all witnesses at oversight hearings whether they be private citizens or cabinet secretaries. >> i thank you for your comments and i just want to join you in simply explaining that the swearing in of the witness before apoversight committee hearing has always been under oath, that is a standard procedure when we're conducting an oversight hearing. so is it may seem strange to have the secretary of health and human services have to be sworn in, but all witnesses in an oversight hearing are sworn in and that is our procedure. >> thank you. so i would now like to introduce

our witness for today's hearing. the honorable kathleen sebelius is the secretary of the department of health and human services. she was appointed to this position in april of 2009. was sworn in as the 21st secretary on april 28th, 2009. so i will now swear you in if you would rise. as ranking waxman and i just discussed, the committee is holding an investigative hearing and have had the practice of taking testimony under oath. do you have any objection to testifying under oath? and the chair now advises you that you are -- i now read you -- do you swear the system you're about too give is the truth, the whole truth and nothing but the truth? >> i did do. >> you are now under oath. subject to penalties set forth in the u.s. code.

you may now give a five minute summary of your written statement.and thank you for being here. you'll have to use the mike. >> thank you, chairman upton, ranking member waxman, members of the committee. ups my position as governor of kansas 4 1/2 years ago for the opportunity to continue work i've been doing for most of my over 35 years of public servicek i've been doing for most of my over 35 years of public service. to expand opportunities for all americans to have affordable health coverage. during my years as a state legislator, as elected insurance commissioner, as head of the national association of insurance commissioners, and as a two term governor and now as hhs secretary, i have worked on that effort that i care deeply about. there is still millions of americans who are uninsured as well as underinsured. people who have some coverage at

some price for some illness but have no real protection from financial ruin and no real confidence they will be able to take care of themselves and their families if they have an accident or illness. and for them, a new day has finally come. in these early weeks, access to healthcare.gov has been a miserably frustrating experience for way too many americans. including many who have waited years, in some cases their entire live for the security of health insurance. i am as frustrated and angry as anyone with the flawed launch of healthcare.gov. so let me say directly to these americans, you deserve better. i apologize. i'm accountable to you for fixing these problems. and i'm committed to earning your confidence back by fixing the site. we're working day and night and will continue until it's fixed. we've recently added new management talent, additional technical expertise and a new

general contractor to identify, prioritize and manage fixes across the system in two broad categories. performance which deals with speed and reliability, and function which deals with bugs and problems in the system. our sensitive assessment has determined that healthcare.gov is fixable. and i want to just outline a couple of the improvements we've made to date. we now have more users successfully creating accounts. we can process up to 17,000 account registrations per hour or nearly five per second. instead of some of the users seeing a blank screen at the end of the application process, they can now see whether they're eligible for financial assistance and make more informed decisions. because we've improved performance, customers can now shop for plans quickly, filtering plans take seconds, not minutes. years are getting fewer errors and time-out messages as they move through the application

process. and the system has been strengthened with double the size of server, software that is better optimized and high capacity physical database which replaces virtual system. the chairman referred to outages this weekend and again yesterday. i would suggest to the committee that if you read the statement of verizon who hosts the cloud service, it is the verizon server that failed, not healthcare.gov and it affected not only hhs, but other customers. we still have a lot of work to do. we have a plan in place to address key outstanding issues. it includes fixing bugs in software that prevented it from working the way it's supposed to and refreshing the user experience so folks can navigate without encounters error messages and slow response times. by the end of november, we're committed that the vast majority of users will be able to review their options, shop for plans and enroll in coverage without the problems way too many have been experiencing. but consumers are using the site

every day. and continue to do so. and problems are being solved. but we know that we don't have a fully functioning system that consumers need and deserve. we are still at the beginning of a six month open enrollment which stepds through the end of march and there is plenty of time to sign up. just to put it in perspective, average is two to four week. the new marketplace has a 26 week open enrollment and those who enroll by december 15th will be able to access their benefits on day one. even with the unacceptable problems with healthcare.gov which we're committed to fixing, the affordable care act by any fair measure is working for millions of americans who are benefitting from new health security. young adults, measuamericans li with pre-existing health condition, seniors on medicare. 85% of americans who already have health coverage are protected with new rights and benefits. the 15% of our neighbors and

friends who are uninsured have affordable new options in a competitive market. and cost growth is lower than it has been in years. millions are clearly eager to learn about their options and finally achieve health security made possible by the affordable care act. my commitment is to deliver on that promise. thank you, mr. chairman. >> well, thank you very much. if you -- the mike got pulled a little bit from you. i'll start the clock. i appreciate you being here this morning and we've worked with our leadership to see that we don't have votes on the house floor this morning so we won't be interrupted. i appreciate your time for sure. and in an effort to allow every member to ask a question, we're going to be reducing the time for questions to be just four

minutes so hopefully we can get through all the members that are here. and so we have plenty of questions, so let's try and get through them. everyone remembers president's words. if you like your health care plan, you can keep it. period. under the afford care act, insurance policies that were in effect on march 23, 2010 when the law was enacted would be grand fathered. then a few months later despite the president's word, hhs helped promulgate a new reg that in your own review showed that it effectively could deny perhaps as many as more than 50%, maybe even higher, of those holding individual policies the right to renew their own insurance plan. and i would guess that there are a lot of us on this panel today that are hearing from angry and confused constituents who are

now being forced to go on to an inept website, whether they like it or not, to shop for a new replacement policy. they're finding premiums often more than 100% what they're paying before, some even as high as 400% as i've heard from and rising deductibles, as well. so when was the president specifically informed of the regulation change, and if so, was it pointed out that this totally undermines his biggest selling point? and i would note that on the screen in a statement that he made more than three years after the regulation change was promulgated, the president said again, so the first thing you need to know is this. if you already have health care, you don't have to do anything. so he's been on the same page from the very start yet the regulations changed months after the bill was enacted that are

now causing perhaps millions of americans to be denied the ability to renew their individual coverage. why was that change made and did the president know it? >> mr. chairman, there was no change. the regulation involving grandfathered plans, which apply to both the employer market and the individual market, indicated that if a plan was in effect in march of 2010, stayed in effect consumer, that plan would stay in effect and never have to comply with any of the regulations of the affordable care act. that's what the grand father clause said. the individual market which affects about 12 million americans, about 5% of the market, people move in and out, they on which have coverage for less than a year, a third of them have coverage for about six months. and if a plan was in place in

march of 2010 and again did not impose additional burdens on the consumer, they still have it. it's grandfathered in. >> why not let the consumer decide whether they want to renew it or not, why were regulations promulgated in the summer of 2010 that then undermined the ability for those folks to resign up which is one of the reasons for the large number of cancellation notices? >> we medically underwritten. that will be illegal. many women are charged 50% more than men. that will be illegal. you cannot eliminate someone because of a pre-existing condition. you can't lock someone out. so those provisions. but if a plan was in place at

the time that the president signed the bill and the consumer wants to keep the plan, those individuals are grandfathered in and that's happening across the country in the individual market. >> we're learning in fact that folks who did have a plan who liked it are being told that it's canceled in the last -- well, my time has expired. let me yield to the ranking member for four minutes. >> thank you. i had to smile at your line of questioning because everybody expected this hearing was about the website. that's all we've been hearing about is the website. but that's not the only complaint we've been hearing about since the affordable care act was adopted. we were told that millions of jobs would be lost and in fact there have been a gain of 7 million jobs. they said that the cost for health care would sky rocket and the opposite is true. they said there would be a massive shift to part-time jobs and the evidence doesn't support

that. they said tens of millions will lose their insurance, but in fact everybody will have access to health insurance because they won't be discriminated against. they said that it would explode the deficit and yet all the reputable organizations like the congressional budget office have told us that it's going to save us $100 billion over ten years. so we've had a litany of objections from the republicans about the affordable care act which has driven them to such a frenzy, they even closed the go. . so now we have you before the committee. and you're being asked he i suppose later you'll be asked about the website. but let me pursue this question about individuals have gotten notices that they will have their individual insurance policies canceled. they will be able to get another plan, won't they? >> actually it's the law that they must. tip us coverage is part

continuous coverage is part of the law. and that wasn't the case in the past. fr . >> so it said we'll end the worst abuses of insurance companies, we'll create consumer protections in the marketplace. they will be able to buy a policy even if they have been sick in the past, that women won't be charged more than men, that we're not going to let insurance companies deny coverage because of pre-existing conditions. that we won't let them put these life time caps. and there will be apessential benefit package. so usual not byou'll have the minimum that everybody should have. prescription drugs, mental health coverage. are these important consumer protections? >> i would say they're very important. as a former insurance commissioner, i can tell you that the individual market in kansas and anywhere in the country has never had consumer protections. people are on their own. they could be locked out, priced out, dumped out. and that happened each and every

day. so this will finally provide the kind of protections that we all enjoy in our health care plans as part of a group, as part of a plan that has pre-negotiated benefits. we enjoy that kind of health security and individuals in the buying insurance on their own, farm families, mom and pop shops, entrepreneurs, young adults have never had that kind of health security. in n . >> now they will have the health security and most of the plans as i understand it, that they will no longer be a able to keep, don't meet all the standards of the law. >> again, i think you may have heard pat garrity who was on some of the sunday shows and he talks about the fact that the florida plans want to keep their customers. they have new plans to offer. they feel that a lot of people, and these are mr. garrity's words, will have a much better plan at a similar or lower cost,

50% of these 11 million to 12 million people qualify for a subsidy, for financial help purchasing insurance for the first time ever. >> the bottom line is that people with good coverage like medicare and medicaid and employer coverage can keep that. people with grandfathered plans in the individual market will be annual to keep it. but for insurance companies -- if they sold you a new modified health insurance policy after the daft t date of the enactment that does not meet the standards, they can go into the cexchange and buy a plan that won't discriminate. that i think's a good result. i'm pleased with it and i think most people will be as well. >> jthe i can't's timgentleman' expired. >> madame secretary, before, during and after the law was passed, the president kept saying if you like your health

care plan, you can keep it. so is he keeping his promise? >> yes, he is. >> okay. what do you say to the 300,000 people in florida you just mentioned or to the 28,000 in ten see that cannot get health insurance? their plans are tirm natured. is he keeping his promise to them? >> first of all, congresswoman, they can get health insurance. they must be offered new plans, new options either ims the mins the marketplace or if they don't qualify for a financial subsidy, they can -- >> but you said to nbc news who says millions will lose their coverage. >> well, in all deference to the press corps, many of whom are here today you can i think that it's important to be accurate about what is going on and i would defer again to the president of the plan -- >> madame secretary, let me tell you something. what do you say to mark and

lucinda in my district who had a plan, they liked it, it was affordable, but it is being terminated and now they do not have health insurance? >> insurance companies cancel individual policies year in and year out. they are a one year contract with individuals. it they are not life time plans, they're not an employer plan. >> pretty me move on. i will remind you, some people like to drive a ford, not a fair rarely p. and some people like to drink out of a red solo cup, not a crystal stem. you're taking away their choice. let's put the screen shot up. i want to go to the website. this is what is happening right now with this website. we've had somebody in the back trying to sign on. it is down. it is not working. last week i asked for the cost from each of the contractors that were with us last week. so can you give me a ballpark of what you have spent on this website that does not work that

individuals cannot get to? what is your cost estimate? >> so far, congresswoman, we have spent about $118 million on the website itself and about $56 million has been expended on other i.t. to support the web. >> would you submit a detailed accounting of exactly what has been spent and when do you expect constituents to stop getting these kind of error messages? >> again, i was with the -- talked to the president of verizon over the weekend on two occasions. verizon hosts the cloud which not part of the website, it is a host for a number of websites. the verizon system was taken down saturday night into sunday, it was down almost all day sunday. they had an additional problem that they notified us about yesterday. and it continues on.

so i'd be happy to talk to the president of verizon and get him to give you your information about -- >> let me come back to that because i want to get to this issue of exactly who is in charge of this project. because you're now blaming it on the contractors and saying it's verizon's fault. so let me ask you this. did you ever look at outsourcing the roeflt system intake great tore, and obviously you did not from the contractors that we had last week, i all -- they had several different people, whether it was you or gary cohen or michelle schneider that they thought were this charge. so who is responsible for overseeing this project? is it you or your designee? >> let me be clear.pointing fin verizon. we own the site. the site has had serious problems -- >> who is in charge, madame secretary? >> the person now in charge as

an integrator is qssi. >> who was this charge as it was being built? >> qss echl schlqssi was in cha until -- >> at that team, who was in charge? >> michelle snyder. >> the chair recognizes mr. dingle. >> i have a few questions i'll be asking you on behalf of congresswoman porter. i would like to begin by thanking you, welcoming the secretary to a room in which her father served for so many years. i begin by quoting from an

expert for whom i have enormous respect. he said as i mentioned earlier, the new benefits and its implementation are hardly perfect. rather than trying to scare and confuse seniors, i had hope that we could work together as we go through the implementation phase to find out what is wrong with the program and if we could make changes to fix it. let us do it and let us do it in a bipartisan fashion. it is too big a program and too important to too many people to do that. but having said that, it does appear that it is working. let us admit it and not keep beating a dead horse. my beloved friend mr. barton whoic gave us the beginning of our efforts today. i've seen reports that consumers receiving plan cancellation notices from their insurance companies saying that plans are no longer available. does the aca require insurance

companies to discontinue the plans that people have when the law was passed? yes or no? >> not when the law was passed if the plans have not changed, nos. that's the grandfather clause. >> that's because the plans existed prior to the passage of the law are grandfathered in. p. >> that's correct. >> so if the insurance companies no longer offer a certain plan that's because that insurance company made a decision to change their policies and that caused them to take away the grandfather status from their insurance purchasers.ame secret to submit a statement of what it is we can do about insurance companies that run around canceling the policies of their people. i don't have time to get the answer, but i want to get a very clear statement from you is for what you can do. so we can take some skin off some folks that have it coming.

madame secretary, it's my understanding that these decisions of a business character are most common in the individual insurance market and that much turnover already exists, existed prior to the enactment of the legislation. >> that's correct. >> is that correct? >> yes, sir. >> is it correct that 35% to 67% of the enrollees in the individual market leave their plan after one year for different reasons? >> a third are in about less than six months in the individual market and over 50% are in for less than a year, yes, sir. >> now, in the cancellation letters which move around from the insurance companies, some insurance companies are suggesting an alternative plan at a higher price. do they have the right to do that? >> they have a right do that, but consumers have a right to shop anywhere to compare plans and they have choices now that they have never had before. and some financial assistance

coming in the way of -- >> and they have no right to enforce that demand on -- >> absolutely. no one is rolled over into on plan. in fact individuals for the first time ever will have the ability to compare plans, to shop and to make a choice inside or outside the marketplace. >> looks to me like the insurance companies are trying to inflict on their customers the view that this is their right and that this is the only option available to them. is that correct? >> i think that insurance companies would like to keep their customers. having said that, customers for the first time have a lot of choices because they can't be locked out of -- >> but the companies have no right to enforce that view on the customer. >> there is no rule that says you have to stay with your company or you have to be rolled over. >> the gentleman's time has expired. >> -- tell you that you've got to buy a particular policy, is that right? >> absolutely. >> the gentleman's time has expired. the chair will recognize the gentleman from texas, mr. barton.

>> thank you. before i ask my questions, we have a former member of the committee on democrat side from the great state of kansas in the audience. and we're glad to have you. madame secretary, we're glad to have you, too. >> thank you, sir. >> there is a famous movie called the wizard of oz and there is a great line, dorothy at some point in the movie turns to her little dog toto and says we're not knin kansas any more. while you're from kansas, we're not in kansas anymore. some might say we are actually in the wizard of oz land given the parallel universes we appear to be has be to. most on the democrat side think things are great. you have said it's a debacle, but you also seem to position that the affordable care act is great.

myself and others have a different view. ultimately the american people will decide. now, last week when the contractors were here, focussed my attention on the apparent lack of privacy in the website. if we'll put up the first slide that i had last week. if we can. this is what's public, madame secretary, and it's basically a disclaimer that says that any unauthorized attempt to upload information or change information on the web seat is prohibited. it really doesn't say anything about privacy. but you do have to accept that in order to go forward with the application. the next slide shows what's not public. this is in the source code. we tried to determine this morning if it was still in the source code, but it's been pointed out the website is down. this is much more what i would

say frightening to me. it says you have no reasonable expectation of privacy regarding any communication or data transiting or stored on the information system isn't and for any lawful government purpose the government may monitor and intercept, certainly and seize any communication or data stored on the information system, any communication or data transiting or stored on this information system may be disclosed or used for any lawful government purpose. cheryl campbell of cgi said she was aware of it but said that it wasn't her responsible to put that in the source code. were you aware of it and was it your responsibility to put this in the source code? >> mr. barton, i did not put things in the source code. i can tell you it's my understanding that that is boiler plate language that should not have been in this particular contract because there are the highest security

standards are in place aunts people have every right to expect privacy. >> now, the last time we could check, this was still there. you're given almost unlimited authority unexercise the affordable care act to administer it. will you commit to the committee and to the the american people that, one, do you want to protect their privacy and, two, you will take this out, fix it, make sure that it doesn't have bearing on people that try to apply through the website? >> yes, sir. and we have had those discussions with cgi and it is understand way. i do absolutely commit to protecting the privacy of the american public and we have asked them to remove that statement. it needs to be taken down and we should be held will accouaccoun protecting privacy. >> i sincerely appreciate that and i'm sure the american people do, too. my last question or it's really a comment, i've introduced hr

3348 which says let's make this system voluntary for the first year since we're having so many problems. and let the american people decide. what that means is if people choose not to participate, they would not be charged a penalty for nonparticipation. would you support such a reasonable approach to this while we work out the problems in the system? >> no, sir. >> well, that's an honest answer. >> the gentleman's time has expired. the chair will recognize the gentleman from new jersey, mr. palone. thank you. i knowkansas, but i to believe increasingly we're in oz. so this wizard of oz comment i think is particularly apropos given what we hear on the other side of the aisle. i don't know how you keep your cool, madame secretary, with this continuous effort on the part of the gop to sabotage the aca to scare people and bring up red herrings.

and i think that this privacy issue is another red herring. and i'm going to ask you a question about that. but before that, i just wanted to say this whole idea that is being brought up today that somehow, you know, policies are being canceled and people don't have alternatives, it's just another red herring. what i think my colleagues on the other side forget is that this is not socialized medicine, this is in fact private insurance in a competitive market. if i'm an insurance company and all of a sudden everyone else is selling a better policy with better benefits at a lower price, i can't continue to sell a lousy skel top poetal policy costs more because i'll be out of the market. so that's what's happening here. insurance companies are canceling lousy policies with high prices because they can't compete. and that's what's going to happen when you have a private insurance market which is what we have here. we don't have a government controlled system. we have private market.

so i wanted to make that point. but i have to drill down on what mr. barton said here. before reform, the individual insurance market was dysfunctional, premiums would shoot up if people got sick, their coverage could be canceled if they had a pre-existing condition, and they did not have secure quality coverage. i've heard my republican colleague say that patient health information will be at risk in this application process, and this is plat ois f false. they make a leap forward by taking it out of the insurance application process, by banning discrimination based on pre-existing conditions. mr. barton again is raising this red herring just like the cancellation of insurance by talking about privacy. but madame secretary, prior to the aca when people applied for insurance coverage, it insurers make them provide a long detailed invasive medical history that now because the law bans discrimination based on pre-existing conditions individuals will not have to

provide this information in their applications? so regardless of this clause, please comment on the privacy issue and where it's irrelevant. >> in the past, any individual american who was in an employer based coverage, in government coverage like the ones we enjoy, in medicare, in medicaid, in the v.a., a whole variety of plan, that's about 95% of insured americans, had no medical underwriting. had group protections. people outside that consumer protected space were individuals buying their open coverage in an shred market. medical underwriting demanding health records and often going through expensive dr. interviews and getting health records was a standard for that market. pricing could vary widely.

that's the market that is currently being reformed with consumer protections. if a person had a policy in place in march of 2010 and the insurance company made no changes, those policies are in place. you keep it, you like it and that goes on. for the people who, though, were paying more than their neighbor because they happened to be female, could not get their health condition for a fixed tip written into the insurance, they will have a new day in a very competitive market. 25% of the insurers are brand new to the market and they are offering competitive plans. >> could i ask the document -- >> put it in the record without objection. the chair recognizes mr. hall. >> thank you, mr. chairman. madame secretary, i think

congresswoman blackburn asked you about how much they spent today and they're spending some money as we speak, aren't they? it's down right now, isn't it? you projected ongoing problems? >> i'm sorry, sir, i'm having a hard time hearing. what was the -- >> she asked you how much you have spent today and i'm asking you what you expect to pay niche to that on the repairs that the website will require and they're requiring them as we speak here. so those are things you project, you knew they would happen and they will happen. which you surely looked ahead and you have some estimate of what is going to happen. >> yes, sir. >> going to on. >> for our two major contractors who are qssi, subsidiary of united and for cgi, there are obligated amounts.

for cgi who is in charge of the entire application, there has been $197 million obligated. and that is to last through march of 2014. as i said before, about $104 million has been expended in that only gate eobligated amoun. >> i'll try to be here in 2014 to make sure that your testimony is correct. i'm just joking with you. >> okay. >> and were you born in kansas? >> i was not. i was born in cincinnati, ohio. i married a kansasian and went to cap satisfies. >> i was in third grade there and i thought i saw on you a tricycle there one day. >> well, it was an illusion. >> let me ask you a question. have you ever rejected a financial bill from one of the

contractors? have you ever? >> have i ever -- >> rejected a financial bill from one of the contractors. >> sir, again, our -- >> i guess you can say yes or no. >> our cutting office does a rue team review of every bill. i don't personally. i want on be accurate about i don't personally pay contracts, negotiate contracts, by law and by press contecedenprecedent, tr someone who isn't a warranted contract officer to engage in the debate or discussion around federal contracts. >> how much has the administration spent on the exchanges in total, not just healthcare.gov, but all of the exchanges? >> suffeir, i'm -- >> if you can't give to me -- >> i would like to get it to you you in writing very quickly. >> i'd like to talk, i don't know how much time i've got left, but and i had like to talk about a couple of businesses in my district who are struggling with how to move forward.

one is a manufacturer, one is in the pet boarding and training business, one has 85 employees, the other 56. here are quotes from some of their recent letters. the situation we're in is we would have to pay $170,000 in penalties under obama care. this is another example of the government picking the winners and losers. we're the losers. no way i can be competitive if i have to raise my prices to cover $170,000. here are my options. do not pay the penalty, raise my prices and go out of business, 85 people lose their jobs. layoff 35 employees who don't have to pay the penalty and move more production to this country, reduce 35 jobs. here is a quote from the other. since high labored low mar begin business cannot afford to pay for insurance for our employees, we're faced with either closing our business perhaps through bankruptcy so heavy financial obligations would continue whether we operator not. fire enough employees to get under 50 employees, even if we close the location, we cannot

escape many expenses such as rental agreements. what am i supposed to tell these people? >> sir, i think that in the employer market about 95% of all american businesses are exempt from any kind of requirement to cover employee insurance. and they are outside the law. they continue to be outside the law. for alarm employers, about 96% of them already cover their employees. and as you know, the penalty that your constituents referred to is not a penalty imposed in 2014. this is being discussed with businesses about what i kind of information is exchanged -- >> i thank you. he's going to use the gavel on me if you don't hush. >> gentleman's time as expired. we recognize the lady from

california. >> thank you, mr. chairman. welcome madame secretary. you're a distinguished woman. you have distinguished yourself and your state. the offices that you've held. and now, working for the american people. and i salute you for it. i want to really congratulate my republican pals for being absolutely, 1000% consistent. you love what's wrong with the website. and you detest what is working in the affordable care act. and i think that that is on full display here. let's get back to the website. that's what this hearing is about. it's my understanding that november 31st is the -- is a hard date for having everything up and running. do you have -- now, hhs did

testify in september that they were 100% confident that the site would be launched and fumly functional on time on october 1st. that didn't work. do you have full confidence in this new hard date? >> congresswoman, i can tell you that the assessment that we have made is that it will take until the end of november for an optimally functioning website. i know that the only way i can restore confidence that we get it right is to get it right. so i have confidence. but i know that it isn't fair to ask the american public to take our word for it. i've got to fix this problem and we are under way doing just that. >> but are you confident -- i think i said november 31st. which does not exist. november 30th. you have confidence in november 30th? >> i do.

>> is there any penalty to qssi or cgi for not delivering on what they promised? >> well, i think the -- as you can see, we have a obligated funds for tore a contract. we certainly have not expended all of those funds. and we expect not only the cms team, but or contractor partners to fulfill their obligations. >> but if they fail to fulfill their obligations, i don't know what's in the contract -- >> well -- >> -- is there a penalty? >> there isn't a built-in penalty. but paying for work that isn't complete is not something that we will do. qssi, as you know, as taken on a new role as integrator of the hub that they built and have in operation is working extremely well. not only for the federal e exchan exchanges, but all the

state-based ones are using the hub. that's why we had confidence in their ability to take the next roleon. and it has to be driven with a clear set of out comes and deadlines and they will be helping to manage that process. >> on the issue of security, there was a security breach that arose recently that i read about, at any rate. and what i think is very important here, because the issue of privacy has been raised, and i think that that has been answered. because very importantly, there isn't any health information in these systems. but there is financial information. so my question to you is, has a security wall been built and are you confident that it is there and that it will actually secure the financial information that

applicants have to disclose? >> yes, ma'am. i would tell you that there was not a breach. there was a blog by a sort of skilled hacker that if a certain series of incidents occurred, you could probably get in and obtain somebody's -- >> isn't that telling? isn't that telling? >> and we immediately corrected that problem. so there wasn't a -- it was a theoretical problem that was immediately fixed. ill tell you we are storing the minimum amount of data because we think that's very important. the hub is not a data collector. it is actually using data centers at the irs, at homeland security, social security to verify information but it stores none of that data. >> the time has expired. >> welcome, madame secretary. before i start my questions, the

"washington post" gave the administration and the president, yourself, four pi noek yoes on this whole debate of if you like this insurance you have, you can keep it. would you recommend to the president that he stop using that term? wouldn't that be helpful in this debate? >> sir, i think he use the term at the time that the law was passed -- >> and as of september 26th, also. so the answer is you don't believe that the "washington post" -- >> i don't -- >> well, we'll hand this down to you so you can see it. have you ever shopped -- i know you have -- at a grocery store with a coupon? have you ever used a coupon? >> yes. >> so the coupon gives you the terms and conditions of when you go to the checkout to get whatever is off the price of the goods. when you all added the c plans now option, you in essence gave the searcher in essence a coupon

based upon what they're seeing there. the desire was, let people know what the price is. however, as the news reported and i followed up in last week's hearing, was that if you are under 50 years old, you get quoted the price of someone who is 27. if you're older than 50 -- if you're older than 50, could be 64, you get quoted a price of someone who is 50 years old. isn't that misleading? >> sir, the learn side of the website which has been up since -- >> that's truthful then? >> it's clearly a hypothetical question -- >> now on the c plans option, are you saying this this is a hypothetical? that's not what it says on the site. it says this is the price when you put in your age. and if your age is 49, it quotes you as if you're 27.

>> sir, the only way someone can get an accurate information about their price is to get their -- >> let me ask you another question. when did you decide to use this below 50 at 27 and above 50 at 50 years old? when did you make that decision? >> that was decided by the team as -- >> by who? who made the -- the problem with this whole debate is y'all won't tell us who made the decisions. >> i can tell you i did not design the site. >> who? who made the decision on the 27-year-old quote for someone who is 50? >> i just said i will get you that information, sir. >> thank you. let me go to -- because it's misleading. and the white house insist it didn't mislead the public. and we find out you did. let me finish on this. another transparency issue. if someone, a constituent of

mine or someone in this country has strongly held pro life views, can you commit to us to make sure that the federal exchanges that offer that is clearly identified and so people can understand that if they're going to buy a policy that has abortion coverage or not? because right now you cannot make that determination. >> sir, i don't know. i know exactly the issue you're talking about. i will check and make sure that that is clearly identifiable. >> here is our request. can you provide for the committee the list of insurers in the federal exchange who do not offer as part of their package abortion coverage? >> i think we can do that, sir. >> you should be able to do it. >> i just -- >> no, you said, if we can do it. >> i think is what i said. >> i think or i know we can do it? >> sir, i can't tell you what i

don't know firmly right now. i know that is the plan. i will get that information to you. >> gentleman's time as expired. the chair recognizes mr.the gentleman from new york. >> my republican colleague's actions here remind me a story when i was a little boy. that's the story of chicken little who ran around yelling the sky is falling. but unlike them, my republican colleagues are actually rooting for the sky to fall. republicans are holding this hearing today under the aus misses an investigative hearing as if they want to get to the bottom of what went wrong in order to help fix it. but i don't think there's one person in this room who is naive enough to actually think that they want to see this law work. they voted to repeal the law,

shut down the government in order to stop it. they're rooting for failure. madame secretary, can you tell us what would be the impact on america's health insurance if they had been successful in their efforts to defund or repeal the affordable care act. >> well, i think that the estimated of the congressional budget office is that it would increase the deficit by about $110 billion in the first decade and close to a trillion dollars in the second decade. we know that we have 42 million americans without health insurance at all. some over the medicaid eligibility. but absent that, the affordable care act, those folks would be without any kind of health security. and in the private market, what we know is it take as real toll. but i would say the biggest

issue is not just the financial toll, not the community toll, not the country toll, which is significant, i have a good friend who runs the cancer center at the university of kansas. i was with him in cancer researchers recently. he said if you get a cancer diagnosis, you are 60% more likely to live five years and beyond if you have insurance than if you don't. i think that's a pretty powerful statement for why we need affordable health care for all of our citizens. >> thank you. the republicans have not been able to defund or repeal it. but they have denied requested funding and raises arguments about death panels and socialized medicine. and they worked to intimidate groups to help the spreading of miss information about the cost of coverage. we hear some of that today. and to actively dissuade the uninsured from seeking coverage.

how have these tactics impacted your ability to implement the affordable care act? >> i don't think there's any question that a lot of people need a lot of information. i think it's one of the reasons we had millions try to visit the site. it's why i'm so frustrated and disappointed that the site is not fully functional and why i'm so committed to getting it that way. clearly there is a demand. this is the law. this is not any longer a debate. it was a law passed by both houses of congress, signed by the president of the united states, upheld by the supreme court. and people have benefitted and right under that law. and we've got to get the information so they can make good choices for themselves and their families. >> frankly, i find it disconcerting that my republican colleagues have done nothing by root for this law to fail for the last three and a half years. and now there's a big show being

upset at of problems with the website from keeping people to signing up fast enough. i would say to my colleagues on the other side of the aisle, you're really on the wrong side of history. the website will be fixed and millions of americans will be able to get quality, affordable health insurance coverage through the affordable care act. ance i thank you for being here today. >> chairman of the health committee. >> thank you. welcome. have you personally tried to register or enroll on the website? >> sir, i created an early light account so i would see the prompts coming to people who were interested. i did work my way to the application feature fairly early on. but frankly, i have affordable health care -- >> i just wanted to know if you had been through the process. madame secretary, the official website crashes appear to be

largely a result of the decision to prevent browsing of the plans. cgi federal testified at their hearing last week that they had designed the website to allow users to browse and compare plans before having to create an account. mrs. campbell told us that would weeks prior to the october 1st launch, they were told to turn off the browsing feature. were you aware in september that this decision was made? >> sir, i wasn't aware of that particular decision. that was made by the cms team. i was aware that they were pairing back some features to not put additional risk on the website. >> who made that decision? >> administrator tavenner made that decision. >> and do you know why that was made? >> yes, sir. because we were anxious to get the website up and running and functional. which we clearly have failed to do to date.

although, i would suggest that the website has never crashed. it is functional, but at a very slow speed and very low reliability and has continued to function. having said that, they paired down some of the features feeling that it would be better to load them in later. one was the shop and browse feature. another one was the spanish version of the website and the medicaid transfers. all three of those issues were pair the down in september to not overload the system. >> last week there was testimony that cms was responsible for end testing. and they believe that months of testing would have been preferable to two weeks. do you believe that two weeks was enough time to complete testing of the entire system? >> clearly not. >> and when were you made aware of the result of the test? including the one where the system collapsed with only a few hundred users. >> leading up to the october 1st

date, we had regular meetings with not only a team at cms, but administrators involved. i was made aware that we were testing. as we found problems, we were fixing those problems. i think there is a cgi report at mid-august identifying some problems. and between august and october, that became the pump list for cgi to fix those problems. that's why you test. >> now, in the "washington post" on october 21st, there was an article that said about a month before the exchange opened a testing group of ten insurers urged agency officials not to launch the site because it was riddled with problems. were you aware in september that insurers recommend a delay in the launch of the exchange? >> i was not aware that they recommended the delay. i know everyone was concerned that there were risks and likely to be problems with the brand new integrated insurance system.

i don't think anyone ever estimated the degree to which we've had problems. and certainly the contracting partners did not. >> and did hhs respond to the insurer's recommendation to delay the launch? >> i wasn't in the meeting and i don't -- >> can you find out and answer that question for us? >> sure. i will get back to you. >> mr. green. >> thank you, mr. chairman. madame secretary thank you for taking time to be here today. my district has one of the highest uninsured rates in the country. even worse, we have one of the highest rates who have jobs but don't receive their insurance through the examiner. it's for this reason that i believe houston would be a good place for you to come and spread the word about the benefits of the affordable care act. however, we learned from your office that you're unable to attend. and hopefully i hope we can have an agreement to come to the

fourth largest city and of course we're in the state of texas that has the number of highest uninsured in the country. it's important to me and our constituents to get it right. that's why i share your and the president's disappointment that the website is not working as planned. november 30th is not soon enough. many of my constituents have been waiting for years to be able to purchase health insurance and we owe it to them to get the marketplaces up and running. the contractors have not served our country well and should fix it or not be paid. now we're hearing about the cancelation letters being sent by the insurance companies. are these americans losing their health care coverage because of the affordable care act or because these plans were changed after the enactment of the act? >> i would say it's the latter, sir. if a plan was in place since the enactment of the act, no one would have -- >> so if somebody in america had

an insurance plan before the act, the president was correct, if you like what you had, you could keep it. >> yes, sir. >> the plans were change psd and now they have to comply with the new law? >> think either choose to be grand faurd and keep the same plan and the regulation allows insurance companies to charge medical inflation but a trend line so they didn't have to charge the same price. they could increase it. increase copays and coinsurance. what they couldn't do is cancel benefits that the policy holder relied on. they couldn't disadvantage the policyholder. if that plan is in effect, absolutely it is still in effect. >> but some of these millions of letters that we're hearing about are because their plans changed? >> absolutely. and again in the individual market, plans change every year. >> and even in the small business market that happens. so these plans are now allowed now because they're completely inadequate. they don't offer the minimum

esh benefits, is that the correct? >> that is correct. >> and i assume that every state have some time of minimum mandated beps for the health insurance plans? >> they do. it applies usually to the group markets where 90% of the covered americans gets their policies. >> the americans who received those letters from their companies about cancellations, they're eligible to purchase plans on the exchange? >> or out of the exchange. individuals who aren't interested in some kind of financial help can go outside, inside the exchange. they have choices they've never had before. >> and because of the benefits of the affordable care act, 80% of their premium dollar will come back to them? >> that's correct. >> and i know it's not true in texas. but i don't know any states that have that 80% requirement. >> no state had it, i would suggest, in that kind of broad

base prior to the affordable care act. so -- >> let me give you awn example of one of the plans that i found out. a large company provided $25,000 maximum benefit for their employees in the year. most employees didn't know about it. and until this one constituent found out that she had cancer. and the bill ended up being $300,000. and so that's some of those plans that are not being loud to be sold now, is that correct? >> not only will the plan have a limit on out of pocket cost per year, it will have a limit on a lifetime out of pocket cost and it will take away the notion that you would run out of your coverage in the middle of a treatment. >> i know i'm out of time. but it's like buying a car. it may look good but if it doesn't have a motor that's why -- >> save a lot of gas. but it doesn't get you anywhere. >> gentleman from oregon. >> thank you very much. we're delighted to have you

before the committee. you and i both know how important this issue is to all americans that we get it right. i hope you can appreciate we're trying to understand what we missed along the way. and one of the things that bothered me was the letter that was sent from your agency to the gao back in june 6th. ield read in part, we're in the final stage in finalizing the ip infrastructu infrastructure. hhs is extremely confident that on october 1 the marketplace will open on schedule and millions of americans will have access to affordable quality health insurance. i'm just an average guy from a small town in oregon. but when i read that, it tells me you knowledged everything was good to go. the testing was in place. and we should have full confidence everything would work. correct? >> that's the letter i signed. >> it was signed by your assistant. >> yes. >> so i went into this believing

that things were ready to go, we could have full confidence. because when someone uses the word extremely confident, it tells me your extremely confident. when we had testimony from the witnesses last week, i asked them about the end testing. and they said it should have been months, especially for a project of this magnitude and yet we heard it was only two weeks. now in august, gci told cms in their report -- >> cgi. >> i'm sorry. cgi. thank you. that august 9th there was not enough time in the schedule to conduct adequate performance testing. did that make its way all the way to you and do you think there was adequate time? >> sir, clearly as i've said before, we did not adequately do end to end testing. the products were not locked and loaded into the system until the

third week in september. each of the component parts -- >> right. >> -- was test and independently validated. >> i'm sorry. all of those work, though right? they told us last week that their individual modules were tested and met specification. do you concur with that? >> i do concur with the testing that was done. >> it was the end to end. which is why some of us thought we should delay the very collapse that now is upon us. the second piece here gets back to the "washington post" which i realize you haven't had a chance to read this morning, but the four points about the president repeatedly saying that if you have a plan you'll keep a plan. we all heard that to mean, i've got a plan with a company and i'll continue to have it even if they make minor changes. if minor changes are made, that means the plan changed and that

means you don't get it. >> sir, that isn't true. rules did not say what you just suggested. and i think the estimate given that there would be turnover in the market was really an outside projection. it wasn't our rules. it was a snapshot of what happens in the market. the plans change so dramatically over time that the estimate was they wouldn't not because of our ruls but because of insurance companies -- >> you set up with those market rules that looked like they had to comply with, correct? >> only if they chose not to grandfather the policy. any grandfathered policy stayed in place still would be in place. >> but if they made any change -- >> no. they could make changes in pricing, benefit. they couldn't dramatically disadvantage the consumer. but they could have trend lines. they had wide corridor to make sure that a similar plan so if a

consumer liked the plan, the plan -- >> so here's the practical cat implication. i've got letters all over my district who have gotten letter from their insures that are saying because of obama care, they're no longer going to be in the individual market or at least with that plan in the individual market. and the result is this person from oregon said i was paying $600 a month for $3,000 deductible. now it costs me $800 a month for a $5,000. i've got others i'll put in the record. a woman whose job had 40 hours now down to 29. because of the way this law is getting implemented. i realize my time has expired. >> thank you very much, mr. chairman and thank you, secretary for being with us today. i want to follow up on a couple of those questions that they were asking you about cgi. as you know, chairman eye is a last night released a document

monthly project status report from cgi last night. it looks to me it's sort of a technical document that has a punch list of outstanding open issues. and some of them do highlight items that upon first read seem to be alarming. for example, one of the entries said due to the comprised schedule there's not enough time in for adequate performance testing. but the date of the document that the chairman released is september 6th. and then on september 10th, four days later, cgi came into this committee and testified under oath, quote, cgi federal is confident it will develop the -- deliver the functionality the cms has directed. and we're -- we're trying to figure out, or at least i'm trying to figure out, how cgi is now coming in and saying, you know, we warned everybody that

this wouldn't wasn't going to be ready when they came in and directly told me that they would be ready to launch on october 1st. so it kind of raises a question. how these statements can be reckon sield. one explanation is that cgi was lying to this committee. i think that's unlikely. another is that cgi thought that the items flagged in the report were like a punch list that could be addressed. here is my question to you. was cgi telling your department the same thing that they told the committee on september 10 that the company was confident that its programs would be ready? >> congressionwoman all of the contractors testified here in september and again last week before this committee. and the testimony was fairly similar. that they were ready to go in september, they were asked in -- last week if they had suggested

that we should delay the launch date. each of them said no -- >> so they never asked you to delay the launch date? >> they did not. and frankly, i think it is not valuable at this point. >> right. >> to do a lot of pointing blame, fixing the blame. what i want to do is fix the problem. i think we need the whole team to move ahead and well report back regularly. >> but we're relying on these contractors to fix this. that goes to my last question. which is they've now come in and he says the site is going to be functional for the vast majority of the users by the end much november. is that right? >> that's correct. >> and given what cgi told us and the other vendors, do you believe that that is correct? do you believe it will be pretty much ready to go by the end of november? >> i do. and i think that we are making improvements each and every day.

it is easier to use now than it was two weeks ago. it is way from where we need it. >> so it's not like it's all going to be fine by the end of november. it's beginning to improve already. is that your testimony? >> it is a continuous process as websites are. patches are made, fixes are made on an ongoing base. as we find issues, we are fixing them in realtime. >> and you're to guarantee, yes or no, that people will have privacy when they go on this site? >> absolutely. >> i want to say one last thing, i was on the program where callers call in this morning, and i had a man call in and he got one of those letters from the insurance company that his insurance was canceled. what he did is he went onto the website and he found a better plan and now he's going to sign up. so i would hope that that's what everybody would be able to do. and i thank you, mr. chairman.

>> thank you mr. chairman. and i'm pleased to hear that the website will be fully operational by the end of november. and would you be able -- would you come back to our committee so we could see if that's actually accomplished and how it was accomplished? >> ill make every effort to do that. >> okay. you were governor and state insurance commissioner in kansas. and i reached out to our state insurance commissioner and governor and found out that they have absolutely no data about nebraskians who have tried to enroll or enrolled. as you know, nebraska is one of the states that opted not to do their own exchange and rely on the federal exchange. so it's interesting to me that neither our insurance commissioner nor the governor's office had any data about

nebraskians and this -- this -- enrolling in these plans. i also asked our insurance commissioner if any of the navigators, if they knew who the navigators were and whether they had to apply to be certified or licensed, in essence like an insurance agent would be. and they told me they have no clue who has been authorized by hhs to be a navigator and work with people in nebraska. so this is concerning to me. so i'm going to ask you a few questions along this line. first of all, do you have data on how many people in general in the united states have tried to enroll in a plan through this website? >> no, sir. we do not have any reliable data around enrollment which is why we haven't given it to date.

>> or have any data on how many people have tried to enroll but because of the problems have not been able to accomplish that? >> no, sir. i can tell you i met with insurers last week. and one of the priority fixes is the so-called 834s. the document that -- >> okay. >> -- sends an individual's name to a company and verifies it. that is one of the systems that is -- >> i appreciate that. and the contractors i asked specifically about the information of how many people have tried to enroll, and they say they do have those numbers but can't tell us that because of a contract with hhs saying that they -- they're gagged on that information. >> i would suggest that the numbers are not reliable according to -- >> i tell you what. my question is going to be, though, will you on the record right now authorize them to give us those numbers and let us determine whether those are reliable? >> no, sir. i want to give you reliable

confirmed data from every state and from the federal marketplace. we have said that we will do that on a monthly basis by the middle of the month. you will have that data. but i don't want to turn over anything that is not confirmed and reliable. >> well, but that data out there exists. >> sir, i would tell you right now, it is not reliable data. according to the insurance companies who are eager to have skmers, they are not getting reliable data all the way through the system. one of the problems that we have. >> the number of people that have clicked on and tried to get it or enrolled, i'm not asking about what they enrolled in or whether they came in and said they were 65 and quoted something that they were 27 years old, that should be a pretty reliable number just -- >> the system isn't functioning so we are not getting that reliable data. insurers who i met with said that that is the case.

we know that there are 700,000 applications -- >> reliability i have that data certainly flies in the face of the testimony from the contractors. all right. i yield back. >> thank you, mr. chairman. thank you for your presence mere today secretary sebelius. while i too am frustrated with the flawed rollout i do appreciate your longstanding commitment to improving the health coverage for all americans. i think it's important to know that in my home state and other places as well, we call it covered california, is working. and rates are as much as 29% less than those that they found on the marketplace last year. i'm thankful my constituents now have this option. as i look around to implementation nationwide, it seems clear to me that political

decisions in individual states have really made the difference for consumers. the people embracing this law are delivering for their communities. but those elected who are trying to ignore the opportunities presented and continue to throw out road blocks both here in congress and in state legislators, should not now seem surprised that there are significant bumps along the way. this seems to me to be completely disingenuous. having embraced the law since open enrollment began, californians have started more than 180,000 applications with more beginning every day. i want to have a second to mention a conversation i had just last night with a telephone town hall to my district on the central coast of california. one of the first callers i heard from was a mother from santa barbara.

she wanted to tell me the story of her son. her son is 28 years old. and he had been paying $425 a month for his insurance before the affordable care act. she was happy to report that he has already applied through covered california and has found a policy that, would better for him and has all of the essential health benefits covered and now will only cost him $109 a month. this is significant savings for her son. and this is a story that's being repeated at least in california often. so there are millions of residents in many states who have said up their own websites and marketplaces. in those states, tens of thousands of people are now signing up for coverage. and this is demonstrating that the affordable care act is working. new york and washington, over 30,000 people have enrolled. in oregon over 50,000 people have been enroelds. kentucky, 41,000 people have been enrolled. the success of the state

exchanges shows how badly this law is wanted and needed, how much it will be of help to so many people who want quality, affordable health care. here are my questions to you. what is your assessment of how this first month have been gone -- has gone in the states that are running their own marketplaces which this congress intended that the affordable care act work? >> well, everything we hear from the state-based marketed is that they are doing well. they have not submitted data yet. we, again, are working with them around a monthly schedule so that they will confirm medicaid data and enrollment data. we'll see the real numbers at the end of the month and make sure that they're available to the publg. but everything we hear is that they see the same demand. they are eager to enroll folks. and that that is going smoothly.

>> and what do you think this success shows about the demand and the interest and for affordable health insurance on the part of constituents? >> i don't think there's any -- in spice of a series of road blocks, americans are eager to see what their benefits may be under the law, what their opportunities are, how to get health security for themselves and their families. and we want to make sure that they see those benefits. the website is one of the ways to do that. the call center, on the ground enrollment, personal outreach are a variety of ways. i would tell your colleague, mr. congressman, i would be happy to get a list of the nebraskian folks on the groundment it's public record. i would be happy to send it to

you. >> the time has expired. the gentleman from the great state of michigan, mr. rogers. >> thank you. thank you for being here. is it your testimony that the -- every night to try to increase the functionality of the system, your hot swapping codes, my understanding is that between 2:00 and 4:00, write new code, put it into the system? yes or no. >> clearly i am not hop swapping code. >> you are in charge of the team that is doing that? that happens every night? yes? >> it happens periodically during the hours of 1:00 and 5:00. but it is not a nightly feature. >> has each piece of that code that's been introduced in the system been security tested? >> that's nigh understanding, yes, sir. and. >> each piece of that code has been tested? yes or no. >> i don't know. >> that's -- >> i can tell you -- >> that's a much safer answer.

>> as code it loaded, you need to retest over and over and over again. whether it's retested i can't -- >> you need to test the code. has any end to end security test been conducted since healthcare.gov went live on october 1st? >> my understanding is there is continuous testing as -- >> yes or no. has an end to end security test on healthcare.gov went live, yes or no? >> i will find out exactly what testing they're doing. i know they're doing simultaneously testing as the code is loaded. >> are there any end to end security tests run after every new piece of code -- i'm not talking about testing the kwoed. i'm talking about -- >> i can get you that information. >> i can tell you they're not and i woulden interested to hear kwl not. go to tab two quickly in your book. >> what book, sir?

>> you have a tab there. go to tab 2. while you're looking ield read. dated september 27th and it is to marilyn tavenner. let me just a couple of pieces here. there are inherent security risks with not having all cold test understand a single environment. finally the system requires rapid development in release of hot fixes and patches so it is not always available or stable during the duration of the testing. secondly, the security contractor has not been able to test all of the security controls in one complete version of the system. and if it you look in the first part, which is most troubling, it says, due to system redness issues, the security control assessment was only partly completed. this constitutes a risk that must be accepted before the marketplace day one operations. and so let me tell you what you did. you allowed the system to go

forward with no enkripgs on backup systems. they this no inkripgs on boundaryi boundaryings. you accepted a risk on every person who put their personal financial information at risk because you did not have the most basic end to end test on security of this system. amazon would never do this. pro flower would never do this. this is completely an unacceptable level of security. and we found out after the contractors last week that an end to end testing hadn't been tested on security. because if it's not functioning you know it's not secure. you're ongoing hot patches without end to end tests. the private contractored told us it would take two months just for an integrated end to end security test that i'll tell you

has not happened today. why? because you're constantly adding new code every night to protect the functionality of the system. you have exposed millions of americans because you all believe it was an acceptable risk. don't you think you had the obligation to tell the american people that we're going to put you in this system but beware, your information is likely to be vulnerable? would you commit today to shut down the system and do an end to end security test so that -- >> no, sir. if you read the memo. >> i have read it. >> it goes on to say that weeking testing, including interface daily weekly scans are going on. >> that's not what the memo says. number one. and number two, the contractors will tell you -- >> mr. chairman, a point of order. i think the witness ought to be allowed to answer what was a speech by the colleague. because she's raised a lot of

issues. >> there are no speeches here today? that's -- >> does the secretary wish to respond briefly? >> sir, i would say this document is a document signed by administrator tavenner which discusses mitigation strategies for security that are ongoing and upgraded in an authorization to operate on a permanent basis will not be signed until the mitigation strategies are satisfied. it is under way right now. but daily and weekly monitoring and testing is under way. >> there are people using this system today and she's just admitted again that the system zash -- >> mr. chairman, she didn't admit that. >> gentleman's time as expired. mr.dale. >> thank you. madame secretary, welcome. those of us who fought for this law who voted for this law have

a vested interest in its success. and the concerns that you hear expressed on this side of the panel are real. went to see americans get health care. i think it's somewhat disingenuous for my colleagues on the other side of the podium here to have this faux anger and this faux concern over a bill that they absolutely want to fail and have rooted for its failure and voted over 40-something times to repeal this bill, never putting an alternative plan on the floor for the american people, but just to simply say they want to make sure this plan doesn't skied. and i think their real fear is is that the plan will skied and the american people will learn of the benefits of this plan an not the campaign that's gone on by the republicans for the last three years. madame secretary, i think one of the keys to the success of this man is that we get young people to enroll in this plan.

i have questions about enrollment concerns that i have. now, i understand that you've said approximately 700,000 people have applied for coverage via the healthcare.gov and state exchanges. is that -- >> they've completed an application. >> right. which is different from enrollment? >> that's correct. >> my question is are you expecting, are you expecting a large number or a small number of enrollments during the first month? what is your thoughts on that? >> well, our projections prior to launch were always that there would be a very small number at the beginning. we watched the massachusetts trend which started slowly and built. i think there's no question that given our flawed launch of healthcare.gov, it will be a very small number. >> i mean in the massachusetts plan, i think in the first month there was 123 people signed up, less than 1% of the overall first year enrollment in in a first month. and we saw the same kind of

numbers in medicare part d back in 2006. young americans are the most likely age group to be uninsured. and a lot of us are concerned because of the problems with the website, a lot of these young folks may not come back on. i've got four kids that all work on the internet. if they can't get something in five minutes, they're on to something else. what do we do and what plans are in place by your department to encourage young people to go back and revisit that site and to make sure that we're getting young people looking at that site and accessing it? >> step number one is fix the site. we don't want people to be invited back and then have a bad experience a second time around. i think that's absolutely right. the site is particularly important. tech savvy, young ever generation, folks who we need to enroll. i think that we have -- fixing

the site is step one. and tep number two is getting information to folks that exist. a lot of young people haven't followed the dialogue for the last three and a half years. >> we need a real marketing campaign and reach out to young people. >> we intend to do that. >> at the end of november when you say the site is working bet are, to make sure they're checking that site out. one of my kids is self-employed and he's paying about $140 for a bluecross plan. he's eligible for a subsidiary. he's going to get coverage for about half of what he's paying right now. but i think it's important that we had to prod him to go on that site and enroll. and i think for a lot of young people, they're not going to do it unless it's easy. it's important that we get that fixed. thank you. >> i agree. >> chairman of the oversight

subcommittee. >> thank you, madame secretary and welcome. you had mentioned that the people who did the technology and website made a number of mistakes. when we had verizon before the committee last week they were told within hhs that there were problems. >> verizon wasn't involved in the website. >> with the data. they had a role. cgi. others at in the committee. et cetera. what decisions did you make that affected this, for better or worse, in terms of the data, the ease or problems with the enrollment and being able to track how many people are actually enrolled? >> my decisions specifically to design the website, i was not involved. i am prohibited to choose contractors. we go by the federal procurement. and i got regular reported on

exactly what was done. >> what about the part with regard to getting data as to how many people were enrolled or trying to enrolled rolle. >> the application process at this point does not work end to end. and we do not have reliable -- >> i'm trying to find out if you had asked them to say, look, i'm in charge of this. how many people have tried to enlowell and how many people have enrolled. did you ask that question? >> we prioritized for our contractors that specific fix. and believe me, the insurance companies are eager for us to get reliable data so that their data matches ours. >> i'm trying to find out if you've told that that was part of the plan. let me real quick. we're hearing from thousands of people that had their policies canceled. i heard from one person that just canceled 30,000 individual policies. they said they expect 50,000 to enroll in insurance plans.

just to know, the number of people who have signed up is ten. i'm concerned that a lot of these individuals aren't going to be able to make it by january 1. do you know how many families that will not be able to keep their insurance by january 1? >> for a law that has been in place for a while at the state level, insurance customers must give their customers a 0-day notice about a -- >> i'm wondering if you have a mechanism by where you will know -- >> will i know if your constituents signed up for an individual plan? >> people across america. and do we know how many will be canceled? 1,000? 10,000? >> we know that in the individual market a number of the plans being sold are not grand fathered and are not currently meeting the law. those notices have gone out. we know there are about 12

million people in the individual market. a number of them have plans which meet the health benefits. >> let me put a face on that. a person named paul wrote to me and says i'm supposedly one of the families that this act was supposed to help but it's hurting more and make it harder for my family to live. i have a wife and four children to take care of. another person wrote, i received -- or i had a 2013 plan which if you include everything it was 5,300. the same program is 9,000 for 2014. i liked my insurance. i especially liked the price and now i'm being forced to sign up for something that will be way more expensive. as a single mom who is self-employed i'm worried about how i am going to pay my bills. i hope you have a mechanism for tracking these people.

>> sir, again, i would suggest that there is no requirement that any of those consumers sign up for a plan suggested by their company at a higher price. they have now options -- >> if a plan -- >> health underwriting without preexisting conditions with some guarantees around -- >> she's searching around and she can't find a plan she can afford. >> gentleman's time is expired. gentleman from north carolina. >> mr. chairman, before my time begins, i have a parliamentary inquiry? >> yes. >> i'm always sensitive to committee decorum. and before i do it this morning, i want to ask unanimous consent that i be loud to display the democratic twitter handle. >> go right. >> i hear no objection. thank you. secretary sebelius, thank you for coming today. i would like to ask you about the document that my republican colleagues have just released.

this document is an authority to operate memorandum, to operate the federally facilitated marketplace for six months and implement a security mitigation plan. this document as i understand it describes security testing for healthcare.gov. it says that security testing of the marketplace was ongoing since its inception. and into september of this year. in fact, it says that, quote, throughout the three rounds of security control assessment testing, all of the security controls have been tested on different versions of the system. that's good news. but the bad news is that it goes on to say that because of system readiness, a complete security assessment of all of the controls in one complete version of the system were not tested. this document indicates that cms postponed a final security assessment screening. but in its place, cms did put in place a number of mitigation measures and it concluded that

these measures would mitigate any security risks. question, are you familiar with this document? >> yes, sir. >> is it correct that this document recommends implementing a dedicated security team to monitor, track, and ensure the mitigation plan activities are completed? >> yes, it zp. >> now, is it correct that this document recommends monitoring and performing weekly testing on all border devices including internet facing web servers? >> more than recommended. it's under way. >> is it correct that this document recommended conducting daily and weekly scans? >> yes, sir. >> does this document recommend conducting a full sca test on the marketplace in a stable environment? >> yes, sir. >> is it correct that this document recommends migrating the marketplace to cms's virtual data center environment in the first dwaur of next year? >> yes. >> my understanding is that an

independent security expert is performing security testing on the code that powers the website on an ongoing basis. is that correct? >> that is correct correct. and they did an assessment of the system, gave us a preliminary report. they are in the process of posting their final report. that did not raise flags about going ahead. and the mitigation strategy was put in place to make sure that we had a temporary authority to operate in place while the mitigation was going on. and then a permanent authority to operate will be signed. >> finally, do you have confidence in these and other measures that you are taking to protect the security of american's personal information? >> i do, sir. >> this is the third time you've said it during the hearing and we believe you. thank you. what you're telling us is that these actions and ongoing security testing are protecting the security of the website. that's a message that it's important for the public to

hear. my republican colleagues do not want this website to work. i am convinced of that. they want to block the aca at all costs an even shut down the government to stop the law. for the last four years they have taken every glitch, every simple glitch and hiccup in the law and tried to exaggerate its significance. and that's happening today and it's so disappointing. thank you, mr. chairman. i yield back. >> dr. burgess? >> mr. chairman, i wonder if i might -- make a consent request also? >> yes. >> i would like to request unanimous consent which my opening statement which we're not allow to be given to be made part of hearing. and further, i have a number of questions and i would like to submit those -- >> without objection. >> and ask the secretary for her attention to those so we get answers. it just came to my attention that on cnn, the cnn's website

that the site was hacked just last week. and i will be happy to make this available to you. >> cnn website? >> the cnn ran a story that the healthcare.gov website was hacked last week. and again, i will get this to you and would appreciate your response to that. mr. terry had asked a question about he wanted to get the information about the number of people who signed up and you said you wouldn't provide that because it wasn't accurate. would you provide us with the number of people who have been able to enroll on the telephone? can we get a number of people who have enrolled on the telephone? >> no, sir. we do not have reliable enrollment data. well have that to you by the middle of november as we committed to. we are collecting state data. collecting telephone data, paper data, website data. went it to be reliable and accountable. >> telephone data doesn't seem like it would be that difficult to compile since the number is

likely quite low. >> the telephone goes through the system. >> you have or the president designated i call them a glitch czar. you're familiar with jeffrey zients appointment? >> i asked him to serve in this capacity. >> many of us on the subcommittee were not as comforted as you by that selection because if you'll recall mr. zients history was not the great. we asked him to come and talk to us aboutsy lynn dra in 2011, rerefused. will you come ko commit to making mr. zients available to our subcommittee for our questions? >> you are welcome to ask mr. zients to come before the committee. he is volunteering his serves to us for a period of time. he has been pointed by the president to start in january as the head of the national

economic council. i am thrilled that he has taken on in. >> a lot of people are asking if the president's words leading up to this law, if they matter. and the statement in the "washington post" today edited the president's statement. if you like your health care plan, you'll be able to keep your health care plan if we deem it adequate. especially if you go back just a few years in into the federal register, and i'm quoting here from the federal rental from july 23rd of 2010, the rule -- the interim rule for dealing with the grandfathering written into the federal record newly purchased policies are not grad fathered and they expect a lot of them will not be grandfathered. i hope that the president was aprized of that before he made

these statements. because dleer clearly his statement wasn't operational. >> that was an insurance company's choice and that was a snapshot of what the market looks like. the president made it clear and our policy was to put a grandfather clause in both the employerbased coverage -- >> in the federal register, that was what was reported. >> this isn't a government takeover of anything. these are private insurance plans. >> i do have to ask you this. you serve at the pleasure of the president. but we have had many of your employees here in front of this committee. you do have to ask yourself, are they being purposefully misleading or are they really not that smart. i'm going to ask you this morning for the sake of the future of health care in this country, will you please ask for the resignation of gary cohen because he's repeatedly come to this committee and misled us? >> i will not, sir. >> mr. chairman, a point of

personal privilege. i think the record ought to be to be clear about jeffrey zients. he couldn't make this that day. he asked for another day. he went to omb and had nothing to do with the city lynn dra contract. and he did come before us and talk about it. but his sole role was to represent omb. and there ought to not be any disparagement of jeffrey zients. >> thank you, mr. chairman. welcome, madame secretary. now we all agree that the website problems must be resolved. this country -- developed the internet and the concept of the websites. the fact that the hired private contractors could not build a ready website in nearly three years is inexcusable and after

it's fixed i hope the administration will hold those at fault accountable. but we can't lose sight of the big picture that when it is all said and done, every american will have health care, affordable health care. this is a goal of all democrats and republicans. it's working in my district this sacramento. here is a letter i got, as a self-employee contract employees i've had individually purchased health insurance for 11 years now. insurance that has gone up every year, sometimes more than once. insurance that wouldn't let me add my daughter. insurance that i have underused for fear they would drop me. insurance that has just dropped me anyway because they decided they would no longer offer individual plans. this could have happened to me at any time. i'm so grateful that the affordable care act makes it

possible to get health insurance for me and my daughter. as all of this is happening, i have started my own business. slowly but surely things are happening. the provisions of the acr are helping me in this too. i can clearly see the costs for my future employees, understand these costs and billion my business plan accordingly. and that is just one of the letters that i've received. now, i've also heard from my colleagues on the other side of the aisle complain again and again about how health care reform is increasing health care costs. but the evidence shows something quite different. the recent trends in medicare spending growth are quite remarkable. medicare spending growth is at historically low levels growing by less than one half of one percent.

the same is true on the private side of health care. personal con sums expenditures on health care. everything from health insurance to drugs to hospice care rose by just over 1% in the past year. this is the sloetest increase in nearly 50 years. madame secretary, what does this data tell us about what has happened to health care costs since the aca became law? >> well, congresswoman, you're right. in the last three and a half years since the president sign the affordable care act, we have seen a great slowdown in the extraordinary cost increases year in and year out for health insurance, in medicare, medicaid and private insurance. some of that has to do with some of the features that are currently in place around different care delivery and different payment systems that we are helping to drive given the tools that we have with the

affordable care act. more quality out comes. trying to prevent readmissions. medical homes that prevent people in the first place or help them stay healthy in their own homes and own places. >> so it's true that the private insurance costs are growing at the slowest rate in decades? >> that's true. >> and am i also correct in the -- >> they're on about average about 16% lower than was estimated that those premiums would be. and that's the premium, not accounting for the number of underinsured or uninsured americans who qualify for financial help. they get help from the taxpayers paying for that coverage. >> thank you, mr. chairman. of madame secretary, when you spoke last september, one of the

first statements thaw made about the affordable care act was, quote, but for us democrats, obama care is a badge of honor. because no matter who you are, what stage of life you're in, this law is a good thing. first, if you already have insurance you like, you can keep it. and i end the quote. i'd call it a red herring that misled voters, intentional or not. perhaps had you known that millions would lose their coverage, families would face financial disaster as one constituent recently told me or that the exchange rollout would be played by the multiple delays we have seen, you would not consider it such a badge of honor. fact if your words as those of the president if you already have insurance you like, you can keep it, seem to be directly refuted by the millions of cancelation notices sent to

americans just in the past few weeks. whether your statement was inaccurate or not precise enough, it does strike me that millions of individuals who by listening to speeches like yours voted believe one thing now found themselves without coverage and now scrambling to find coverage in a marketplace that offers more expensive plans with fewer options. in response to my constituents' calls for help, i created a portal on my website that allows those who have experienced problems to reach out and tell me about their personal experiences. in just the last few days my office has received dozens of complaints regarding increases in their monthly premiums. i received one such notice from a mother in her early 50s who just received a notice that not only will her premiums double, but she will also have